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44 comments on Another problem for Yukos
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44 comments on Another problem for Yukos
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GAIA Host Collective
Even at $20/gallon people will drive - a lot less probably, but do we have another option to go to work, shopping or wherever?
What can ruin our economy and cause Kunstler-type scenarious are blackouts.
ARE YOU INSANE?
Twenty dollars a gallon and a huge number of people will not have a job to drive to, no food on the shelves to drive to.
What the hell is it with this nutso American belief in the fuel fairy.
Twenty dollars a gallon will not happen. First, domestic demand destruction. Second, capillary action. (I.E. the small stream users in the third world will be forced to quit using the little fossil fuel they do use and starve.) Third, military adventurism. For awhile we will make the "bad terrorists" give us our due, our tribute.
Once the world gets fed up with our imperialism, they will either spank us militarily, or they will destroy the oil fields. The price will then spike way past twenty dollars. If it ever gets to twenty dollars without any of this happening, it will be a result of monetarization of the debt and runaway inflation.
In my home country price of gas is $4/gallon while average income is about 10 times lower than US. And what do you think - $40 a gallon stops people from driving? Not only it doesn't but 70% of the families have a car. For me to complain about $3/gallon as being expensive relative to $2.50 is funny at the least.
Of course people drive much less than here (~10 times less oil usage per capita) but for this helps the structure of the cities - dense residentials with good mass transit. In US this is largely absent, and I don't see how people will cut off that much. Yes, there is a lot of "fat" demand, but after some point you can not cut off from going to work or to the groceries to buy food.
I agree that under normal conditions gas would not go to $20 - oil will have to be some $600/barrel to justify it. But in case shortages or a dollar collapse occur, it is not out of question.
So, in your country the "price of gas is $4/gallon while average income is about 10 times lower than US." Let's see. That means that since our average income is around 30K, your average income is 3000. That is 250$ per month. I drive a Prius, have a one block commute, and my average month usage of gasoline comes to about 12 gallons a month. At 4 dollars a gallon, that would come to 48 dollars per month or one fifth your average income. I assume you guys eat, live in houses, that is pay mortgages or rent, buy clothes, do some entertaining, wash clothes, pay taxes, buy insurance, you know, the basics.
So that means either I call BS on your post, or you guys are living and working in your cars.
The they you must be referring to are the elites. Guess what? They are not the driving force in the American economy. The mortgaged to the hilt, credit card maxed, consumer zombies are what drive this hallucinated economy and when daddy can't pay the bills, he is screwed. The bankruptcy laws were gutted last year, and he has no recourse. Daddy tries to sell the house, or it is repossessed. Suddenly, a crashed-economy induced firesale of foreclosed properties floods the market, the housing boom goes POP!
No home. No job. No car. Crappy mass transit. No health care. Global warming. A government that gives money to the rich with one hand and takes it from the poor with the other. Cats sleeping with dogs. Were talking real wrath of God stuff here. (cribbed from Ghostbusters)
The problem here is the myopia from which everyone seems to be suffering. It is the same myopia that allows techies to think that global warming will not interfere with THEIR plans, that they can escape the laws of physics, that they are somehow immune from the laws of thermodynamics. It is myopia that causes economists to mumble their free market chants and say, "let the free hand do its work..."
Think globally, act locally. That is not just a bumper sticker slogan. It has real world implications.
And like I said people drive a lot less than here, so the 48$ figure is also an overestimate. The country consumes oil mostly for transporting goods, for mass transit etc., things that are not very elastic per se. But in general, for the average bulgarian energy is very expensive and takes some 15-20% of the family budget, right after food which is around 40%, and close to housing expenses. It is simple - you are receiving a 3rd world sallary, but the prices you pay for energy are the international prices.
Personally I think that the biggest problem of the US society is the lack of problems :) This country has never experienced a major cataclysm and except during several short-lived recessions, the majority of people never touched to poverty. In such environment it is very easy to get detached and to forget that there were generations of hard-working people before you that built those things, that make you warm and fed. Here we often take them for granted, but they are not, and there is always someone working day and night to keep the lights on. That's why I think one should travel a little bit and try to mix with the other peoples problems in order to get a better grip of reality.
I imagine the Department of Statistics geeks over at www.std.lt could supply any details you might want, but generally speaking, I have to second LevinK here. The things that Cherenkov mentions:
I assume you guys eat, live in houses, that is pay mortgages or rent, buy clothes, do some entertaining, wash clothes, pay taxes, buy insurance, you know, the basics.
usually cost considerably less in Lithuania than they do in North America. Not surprising, when the typical monthly wage might be $350-400 (and that's being generous).
To be specific: 1) it is more typical to live in a flat than in a detached house, and that flat is quite likely to be in the range of 50-100 square meters; 2) mortgages came into common usage only within the last 4-5 years; 3) buying second-hand clothes is quite common -- an art form, once you get outside the larger cities; 4) insurance of various forms remains relatively rare -- it is common, for example, not to insure one's residence; and so on.
LevinK's posting on life in Bulgaria rings true to how many non-North Americans get by.
By the way -- haven't posted in a long while due to the kids being home so much lately -- darn Lithuanian winter. Wished I lived in a nice warmer country. Bulgaria sounds pretty good, right about now...
Thank you - nutso First Worlder's in general I think.
People do not understand how crippling this is going to be economically.
"Twenty dollars a gallon will not happen."
I disagree with this - I bet $20/ gallon is one point on the curve in the not-to-distant future .